Corporate Solutions

Afken strives to deliver smarter solutions based on forward looking strategies to organizations of all sizes. We help clients understand their risk picture, both today and in the future, by identifying and proactively addressing risks and opportunities that protect and generate value for shareholders, owners, employees, and customers. By harnessing the power of looking forward, together we can help minimize your exposures and create ongoing success and lasting value.

Whether a large organization with several shareholders, a start-up company, a family-owned business or a non-profit organization ,all have a responsibility to both internal and external stakeholders. At Afken, our goal is to provide a comprehensive insurance solutions to protect any organization and associated individuals, as loss exposure can come from a variety of claimants, including employees, shareholders, regulatory agencies, competitors, customers, lenders, volunteers, and others. Afken’s relationships with leading underwriters offer you the protection you need for a variety of potential exposures.

What we can offer you

Buy & Sell Agreements

A buy and sell agreement is a binding agreement between co-owners of a business that governs what happens if a co-owner dies or is otherwise forced to leave the business, or chooses to leave the business. It may be thought of as a sort of premarital agreement between business partners/shareholders or is sometimes called a “business will”. An insured buy and sell agreement, (triggered buyout is funded with life insurance on the participating owner’s lives) is recommended to ensure the buy-sell arrangement is well-funded and to guarantee there will be money when the buy and sell event is triggered.

A buy and sell agreement consists of several legally binding clauses in a business partnership or operating agreement or a separate, freestanding agreement, and controls the following business decisions:

  • Who can buy a departing partner’s or shareholder’s share of the business (this may include outsiders or be limited to other partners/shareholders
  • What events will trigger a buyout, (the most common events that trigger a buyout are: death, disability, retirement, or an owner leaving the company) and;
  • What price will be paid for a partner’s or shareholder’s interest in the partnership and so on.

Some Buy-Sell Agreement Advantages

  • Provides a smooth transition and continuity of management and ownership to the remaining business owners.
  • Creates an instant market for a business interest that may not otherwise be saleable
  • Provides the liquidity to the retiring owner or to his estate in the event of death.
  • Peace of mind and security for the business, the business owner’s and their families.

Key Provisions of a Buy-Sell AgreementKey Provisions of a Buy-Sell Agreement

  • Stipulates that if an owner plans to dispose of their business interest that they must first offer it for sale to remaining owners or the business itself.
  • The purchase price of a business owner’s interest is based upon a pre-determined formula to be used at the time of death or disability. This allows a definitive price to be set for the ownership interest.
  • Identifies the seller and mandates that he must sell his interest and also identifies the buyer and mandates that she must buy the interest when made available.
  • The agreement is based on a current business valuation which establishes the fair market value of the company and is the basis of the price and terms of sale when applicable.
  • Funding mechanisms such as life insurance and disability income insurance are noted
  • Specific instructions for handling the dissolution of the business.
  • Valid reasons for termination of the agreement.

A systematic process to update business valuations and adjust insurance coverage should be outlined.

Succession Planning

Every business owner knows that building a successful company requires dedication, commitment and hard work. Once a company is established, business succession or business continuation planning becomes an essential part of the process to assure future continued grow. Business succession planning addresses all potential contingencies that may affect a business or business owner including retirement, sale of a business interest, disability or death. With prudent planning, a business can be assured that funds will be available to provide flexibility in the event of retirement, disability or death of a shareholder or sale of a business owner’s interest.

Buy and Sell Agreement Funding

If an owner dies in a situation where there are multiple partners (or even as few as two) who own the company, the shareholder’s agreement likely has provisions for the deceased owner’s shares to be bought by the other owners.

Depending on how the shares are valued and depending on how large the company is, the other owners probably don’t have the liquidity to buy out the deceased’s shares at the drop of a hat.

Structuring Life Insurance for Buy and Sell Agreement Funding

The way around this is to purchase Life Insurance on the lives of each of the owners/shareholders. The beneficiaries are the surviving company owners. That way if someone dies, a life insurance policy on his/her life will give the other owners the cash to purchase the share of the company. The company remains solvent, and the deceased owners estate (family) receives the money from their share of the business.

For more information on Buy and Sell Agreements click here.

Key Man Insurance (Key Person Insurance)

Business owners often insure the company against the loss or damage of its property on the basis that office equipment and inventory are valuable assets and rightfully so ,however, such assets may not be as valuable as key employees.

Consider a top salesperson that is unsurpassed at bringing in new accounts, or a manager who handles the day to day operation of the business. Key employees like these are a firm’s most valuable resource.

If something were to happen to a key person where they were no longer able to do their job due to death, disability or severe illness, profits could be impacted and there might be considerable costs incurred in recruiting, hiring and training a suitable replacement.

For more information on Keyman Insurance click here.

Trusts

Many owners trade as sole proprietors, in a partnership or directly own the shares in a Company or members interest in a Close Corporation. This state of affairs will not guarantee that the benefits accruing from their business interests will flow to the persons they intended. The correct Corporate Structures owned by Trusts coupled with the necessary agreements must be implemented and executed to ensure continuity of the flow of benefits and the elimination of any costs, taxes and duties on the event of the death of an individual. The above applies equally to an individuals investments, properties and commercial property interests. It is critical that income producing assets or appreciating assets are correctly structured to ensure that a legacy is created and that the assets are not sold, very often way below market value to meet creditors claims, or to cover taxes, costs and duties which arise on the death of an individual. Structuring will ensure that the legacy survives an individual’s death.

It is also common practice by entrepreneurs to have their trading entity own their business assets and in this way take advantage of the depreciation benefits.

By housing your assets in the same entity which creditors and SARS could potentially have access to, you are unnecessarily exposing them to risk. Should your business fall on bad times and is unable to meet its obligation, its creditors may then attach all business assets owned by the entity. How then do you protect your assets from the potential risk of the trading side of your business? The answer is simple – purchase your assets in a Business Asset Trust. In this way, your assets will not be exposed to the risk associated with the conducting and carrying on of your business.

For more information on Trusts click here.

Employee Benefits

No business can run without a productive workforce. By offering your employees benefits such as life and disability cover, funeral benefits, private health care and retirement planning, you earn loyalty, decrease absenteeism, increase productivity and secure staff retention. In addition, by having appropriate employee benefits, you ensure that should any of your staff suffer a life changing event, that it will not become a liability to your company. By giving your employees tailored-made benefits, you can ensure their peace of mind in terms of their family’s financial security.

Trust
Who needs a trust?

  • Business Owners
  • Shareholders
  • Property Owners
  • High Net Worth Individuals

There are a myriad of reasons to establish Corporate and Trust structures. The major reasons being; to achieve Asset Protection and to optimise Estate, Succession, Tax Planning and Corporate Structuring. We very briefly set out below a number of salient points on the major reasons to establish the necessary structures for you to consider implementing.

Asset Protection:

Our goal is to get all of our clients to have a personal worth of ZERO, accordingly an individual who owns nothing has nothing to lose. The objective is to legally mitigate an individual’s risk by ensuring that all businesses, properties, investments and or assets are owned in the appropriate Trust and Corporate structures. A Trust is the only legal entity in our country, which can offer an individual total asset protection, this is achieved by virtue of the fact that a trust is not owned by any one individual. A Trust is quite distinct from any individual thus affording maximum asset protection. This is analogous to insuring your motor vehicle; if something goes wrong you are covered!

Estate Planning:

In planning an individual’s estate, the objective is as stated above, to get the individual to own NOTHING. This position is attained by establishing the correct Corporate and Trust structures that will own all the assets, investments, properties, commercial properties and businesses that an individual would have owned. Once this status is obtained an individual will eliminate all taxes, costs and duties which would ordinarily be triggered on the death of the individual, namely Capital Gains Taxes, at an effective rate of 10%, Estate Duties at 20% of the value of the net estate and Executors Fees of the 3.5% of the GROSS value of the deceased estate together with administration costs of 6% of any income administered by the Executor. In following our advices the taxes, duties and costs are eliminated and approximately 30% of the value of the estate will be saved on the event of the death of an individual. In order to complete an estate planning exercise for an individual their Last Will and Testament must be finalised. The Will must dovetail with the Trust.

Succession Planning:

Many owners trade as sole proprietors, in a partnership or directly own the shares in a Company or members interest in a Close Corporation. This state of affairs will not guarantee that the benefits accruing from their business interests will flow to the persons they intended. The correct Corporate Structures owned by Trusts coupled with the necessary agreements must be implemented and executed to ensure continuity of the flow of benefits and the elimination of any costs, taxes and duties on the event of the death of an individual. The above applies equally to an individuals investments, properties and commercial property interests. It is critical that income producing assets or appreciating assets are correctly structured to ensure that a legacy is created and that the assets are not sold, very often way below market value to meet creditors claims, or to cover taxes, costs and duties which arise on the death of an individual. Structuring will ensure that the legacy survives an individual’s death.

Tax Planning:

Many business owners and professionals carry on and conduct their businesses in a tax inefficient manner. A number of factors will determine the ideal corporate structure to conduct the business through. It is of paramount importance that the business be optimally structured, failing which millions of Rands may be unwittingly paid instead of the potential savings that could be achieved in utilising the appropriate structures. The Trust Structures we establish do not generally trade and are therefore usually receptacles of after tax funds, in certain instances using a Trust Structure could be the most efficient and appropriate structure even though a Trust has the highest tax rate. It can all be a little confusing, which is why we are here to unravel the how and the why

Medical Aid (Group)

Have you taken a good look at, and reviewed your company’s benefits package lately? Is it up to date, competitive, in line with or better than your competition?

If it’s been a while, maybe you should. It’s one of the best culture-defining, recruiting and retention tools you’ll ever have.

Your employees are your business’s biggest asset. By providing benefits, you are not only recognising their value, but making their futures a little more secure

Professional Indemnity & Liability

We understand the complexity of risks that an organisation and its leadership face on a daily basis, especially in today’s evolving legal and regulatory environment.

Whether you’re a publicly traded or privately held company, our team ensures each client receives individualised attention, looking at all potential risks given, both obvious and hidden, a customized solution that protects your interests and assets can be done.

Afken Risk Management offers:

  • Broad form public liability and products guarantee
  • Financial Institutions ,bankers blanket bond and computer crime for financial Institutions
  • Directors’ and officers’ liability, errors and omissions and fidelity guarantee
  • Single projects, non cancellable broad form contracting liability and professional indemnity insurance for specific construction projects for the duration of the contract.
  • Professional Indemnity indemnity insurance for the traditional and emerging professions as well as medical malpractice
  • Personal accident ,contingency ,medical insurance, motor, risk managed commercial motor fleets and group personal accident.
  • Top up personal and commercial liability ,liability for fare paying passengers and excess third party motor liability.

Basic Commercial Policy

Afken offers carefully designed products around the unique needs of your specific business.

Types of businesses covered by this product:

  • Travel agents
  • Estate agents
  • General office
  • Training centre
  • Internet café

Fire (Optional)

Covers your business property against loss and damage due to a wide scope of perils ranging from fire, lightning, earthquakes, storms and snow to charges for fire extinguishing at your business premises

Business Interruption

To place you back in the same position if you lose turnover/sales/revenue/income as a result of loss or damage to your business property.

Office Contents

Specific cover for the office furniture you keep inside your business premises.

Theft (Optional)

Ensures that your business goods will be covered against robberies and burglaries.

Money

Protects you in the event of loss of or damage to your cash, cheques or even your safe.

Glass

Specific cover for the fixed glass at your business premises.

Electronic Equipment

A specialised cover extension for loss and damage to your computers and licensed software used for business purposes.

Portable Business Possessions (Optional)

Provides wider cover for business items that are regularly taken away from your insured premises.

Public Liability

Protects you if you are held legally responsible for injuries, death or damage to a third party.

Goods In Transit (Optional)

Cover for your business goods when being transported.

Motor (Optional)

Ensures protection of your vehicle/s against accidents, theft and many other incidents, depending on the type of cover you have selected.

Accounts Receivable

Compensates you if you cannot trace amounts owed to you because your financial records were lost or destroyed in an incident covered under the fire section of your policy.

Fidelity Guarantee

Protects you against losses suffered due to fraud by employees.

Personal Accident

Provides insured owners and shareholders with cover for death, disablement and medical expenses after an accident.

Employers Liability (Optional)

Protects you if you are held legally responsible for injuries, death or illness suffered by an employee.

Accidental Damage

A unique extension to cover your business goods against accidental loss and damage . These incidents are not insurable under any other policy section

Speciality & Niche Commercial Short Term Insurance

Aviation

Our product range includes inter alia the following:

  • Hull All Risks Insurance
  • Hull War and Allied Perils Insurance
  • Third Party and Passenger Legal Liability Insurance
  • Hull Deductible Insurance
  • Aviation Hangar Keepers and Products Liability Insurance
  • Aerodrome Liability Insurance
  • Loss of Use Insurance
  • Personal Accident Insurance

Below are the sectors we can cover:

  • Flying Schools
  • Flying Clubs
  • Corporate Aircraft Owners
  • Commercial Helicopter Operators
  • Airlines
  • Charter Companies
  • Private Aircraft Owners
  • Aircraft Maintenance Operators and Airports.

Agriculture and Vine Cover

Agriculture

We offer crop and asset insurance for the agriculture industry ,with tailor made policies and solutions for the specific needs of the industry.

This includes cover for:

  • Crop – Basic insurance (Hail and multi peril crop) and specialised insurance (stored grain, fire on veld, orchards and sugar cane)
  • Assets – Basic insurance and specialised insurance ,covering livestock, irrigation systems, goods in transit etc.

This policy is flexible enough to fulfill all the personal and agricultural needs of today’s farmer ,including cover for labour practice liability and livestock. Unique features can include extended cover for guesthouses and lodges operating from the farm, emergency medical evacuation and extended liability.

Cover for the Vine Industry

This policy is for farmers in the vine industry ,ranging from cover for farms ,estates ,co-ops ,restaurants or guesthouses. Unique cover includes accidental damage to wine or related products ,trellisis/props, fences and plant material as well as loss of income following damage to plant material and trellisis .Public liability is extended to include product recall ,product guarantee and product inefficacy.

Additional Cover

  • Comprehensive liability cover – This insurance solution is geared toward small to medium size businesses and recognises their particular needs for extended and comprehensive liability cover.This enhanced cover aims to provide protection against larger catastrophic losses.

Tourism, Leisure &Entertainment

Guesthouses

This policy is ideal for guesthouse or bed and breakfast owners, offering you a comprehensive product for your business and private premises with a number of extensions to further enhance the insurance offering.

Tourism, leisure and entertainment industries

Clients whose businesses do not fall within the definition of a guesthouse but who none the less derive their income from the tourism industry (e.g hotels , conference centres, events , golfing clubhouses) can fulfil their insurance needs under this flexible product.

Construction & Engineering

Our products include:

  • Contract works
  • Erection: All Risks
  • Plant: All Risks
  • Advanced loss of profits following machinery breakdown
  • Deterioration of stock
  • Works damage

Transport, Light & Heavy Commercial

Afken Risk Management offers comprehensive cover for the transport Industry including light and heavy commercial:

  • Fleets
  • Trucks
  • Busses
  • Cover for pollution clean up
  • Excess reducers on accident, theft and hijacking
  • Own Damage Excess Buster
  • Loss of use/downtime
  • Credit shortfall cover
  • Deposit protector
  • Goods in transit hijack excess reducer
  • Extended wrekage removal
  • Cross border towing

Medical & Professional Practice

Tailor made products carefully designed around the unique needs of your specific business. It contains exactly the right combination of traditional policy sections to ensure that your business is comprehensively looked after yet innovative new sections have been added as well to meet the specific requirements of your practice.

Medical

  • Dental
  • Physiotherapist
  • Optometrist
  • Veterinary Practice
  • Orthodontist, Chiropractors
  • Psychiatrists
  • Audiologist
  • Surgeons

Professional

  • Accountants
  • Lawyers
  • Auditors
  • Management Companies and Consultants
  • Architects
  • Consulting Engineers

Retail

Afken provides specialised retail risk management and insurance products to retailers. We will assess deficiencies and seek coverage solutions that fit your distinct industry need.

Some of the retail risk management products we offer include

  • Property damage
  • Theft
  • Machinery breakdown
  • Business interruption
  • Professional liability
  • Legal assistance
  • Workers’ compensation

Property Insurance

Afken Risk Management covers all types of property whether it be sectional title, commercial buildings or office blocks we have a solutions for you.

  • Residential blocks of flats, townhouses and cluster home developments
  • Office blocks and office parks
  • Retirement villages ( Excluding frail care liability)
  • Any combination of the above ,including commercial risk, provided that the commercial content does not exceed certain percentages of the full replacement value

True wealth starts with how you spend today.